The Department of Justice (DOJ) recently intervened in a False Claims Act (FCA) case that raises a variety of interesting allegations, including payment of kickbacks by a compounding pharmacy to contracted marketing companies in the form of percentage-based compensation, to TRICARE beneficiaries in the form of copayment waivers, and to physicians who submitted prescriptions without seeing patients.  According to the complaint, Patient Care America (PCA), a Florida compounding pharmacy, implemented a scheme to manipulate the compounding formula for pain and scar creams that resulted in the submission of false claims to TRICARE.  The complaint also names two of PCA’s senior executives (one of which has since left the company) as well as the private equity firm that owns a controlling interest in PCA. Continue Reading DOJ Intervenes in False Claims Act Case Against a Compounding Pharmacy and a Private Equity Firm

In this final installment of our Health Care Enforcement Review and 2017 Outlook series, we analyze health care enforcement trends gathered from 2016 civil settlements and criminal resolutions of health care fraud and abuse cases. Behind the headlines covering enormous recoveries in 2016, several themes are apparent.

The False Claims Act continued to generate large civil settlements.

Continuing the trend from recent years, the False Claims Act (“FCA”) remained the primary civil enforcement tool against health care providers as well as pharmaceutical, life sciences, and medical device companies, predominantly driven by qui tam FCA complaints filed by relators.  In fiscal year 2016, the Department of Justice obtained more than $4.7 billion in settlements and judgments from FCA cases, $2.5 billion of which it obtained from the health care industry.  Continue Reading Health Care Enforcement Review and 2017 Outlook: Significant Health Care Fraud and Abuse Civil Settlements and Criminal Resolutions

Last week the Supreme Court heard oral argument in a False Claims Act (“FCA”) case in which the Court is considering the validity of the so-called implied false certification theory. This theory attaches FCA liability when a person submits a claim for payment notwithstanding a violation of an underlying law or regulation, but without a factually false claim form. Because of the massive volume of Medicare and Medicaid regulations that a provider could potentially violate, the case is significant. More than two dozen stakeholders weighed in with amici briefs.  Here we discuss some of the important questions raised in the oral argument. Continue Reading Justices Grapple with Limits of False Claims Act Liability in Implied Certification Cases

As 2015 comes to a close and you look ahead to the New Year, we hope that you will consider joining us for an informative webinar on health care enforcement trends for 2016. On Wednesday, January 13, 2016, my colleagues Hope Foster, Laurence Freedman, and Bridget Rohde will host “Health Care Enforcement in 2016: A Look Back on 2015 and Forecasting the Year Ahead.” The webinar will highlight key enforcement activities from 2015 and the trends we expect to see in 2016. Continue Reading Upcoming Webinar and Report – Health Care Enforcement in 2016

Next week, my colleague Karen Lovitch will be co-presenting a discussion on Hot Topics in Laboratory Compliance at the American Health Lawyers Association’s Fraud and Compliance Forum in Baltimore, Maryland. The presentation will focus on:

  1. The health care fraud enforcement climate for laboratories;
  2. Relevant state and federal fraud and abuse laws;
  3. Legal risks presented by interactions with health care professionals and other sales and marketing activities; and
  4. Legal and business risks related to interactions with patients, including collection of outstanding invoices.

Continue Reading Hot Topics in Laboratory Compliance at AHLA’s Fraud and Compliance Forum

Earlier today, Attorney General Loretta Lynch announced the largest coordinated crackdown in the Medicare Fraud Strike Force’s eight-year history.  The government brought charges against 243 individuals for approximately $712 million in alleged Medicare fraud.

The government alleges a wide array of misconduct ranging from conspiracy to commit health-care fraud, violations of the Anti-Kickback Statute, money laundering, and aggravated identity theft. The individuals charged include doctors, nurses, patient recruiters, home health care providers, pharmacy owners, and other license medical professionals. Notably, almost 50 of these individuals were charged with fraud related to the Medicare prescription drug benefit program (“Part D”).

Continue Reading Government Announces Health Care Fraud “Takedown”

Last week I attended the American Health Lawyers Association Institute on Medicare and Medicaid Payment Issues in Baltimore, Maryland. Taking a comprehensive approach to reimbursement issues, the program offered a variety of sessions ranging from Medicare and Medicaid program fundamentals to areas of highly-specific technical expertise. Conference faculty included speakers from all parts of the health care regulatory system, including two of my colleagues, Thomas S. Crane and Ellyn Sternfield.

Many of the sessions focused on government regulation and enforcement initiatives and trends related to Medicare and Medicaid reimbursement. Throughout the entire meeting, three themes emerged that are of particular interest:

  1. Data, Data, Data!

Speakers focused on the government’s use of data-driven analysis to identify and predict areas of potential fraud. This discussion confirmed our predictions that the increasing availability of health care claims and payment data and availability of Medicare billing data may lead to increased government and private health care scrutiny, enforcement, and litigation. Government speakers emphasized the use of a multitude of data sources to identify outliers and investigate potential fraud or abuse.

Continue Reading 3 Key Take Aways from AHLA’s Institute on Medicare and Medicaid Payment Issues

Mintz Levin’s Health Care Enforcement Defense Practice has published its most recent Qui Tam Update, highlighting two qui tam cases unsealed in November and December of 2014 and giving an overview of the other 17 cases unsealed during the same time period. Mintz Levin’s analysis of the 19 total unsealed cases revealed that almost half included both state and federal claims and that nearly 70% of the relators in the cases were current or former employees of the defendants. The two featured cases are:

  • United States ex rel. Fox Rx, Inc. v. Managed Health Care Associates, Inc., No. 2:14-cv-00073-JLR (W.D. Wash.), regarding allegations that Managed Health Care Associates, Inc. (“MHA”), a pharmacy services provider, submitted claims for Schedule II controlled substances that were dispensed without a proper prescription. The relator, Fox Rx, Inc., a Medicare Part D plan sponsor, had brought two previous cases against MHA, which were highlighted in Mintz Levin’s October 2104 Health Care Qui Tam Update. Notably, the government has declined to intervene in all three cases.
  • United States ex rel. Rew v. Mission Health of Georgia, LLC, 8:14-cv-00648-JSM-MAP (M.D. Fla.), regarding allegations that Mission Health’s nursing homes and assisted living facilities failed to obtain physician certification of patients’ need for skilled nursing care. The realtor in this case was formerly the Vice President of Clinical Reimbursement for one of Mission Health of Georgia.

Further information about both cases and the trends we’ve observed in recently unsealed cases are available in the full Qui Tam Update. In our Qui Tam Update series, we monitor recently unsealed FCA cases, identify trends in health care enforcement, and discuss noteworthy cases and developments. To receive the Qui Tam Update by email, subscribe here.

Despite the efforts of the Department of Health and Human Services (HHS) to combat fraud and contain costs in federal healthcare programs, Medicare’s fee-for-service program (Parts A and B)  and Medicaid were two of the top three culprits for the billions reported to have been improperly paid by the federal government in fiscal year 2014.  Last week, the Government Accountability Office (GAO) published a report summarizing testimony given by the U.S. Comptroller General, Gene L. Dodaro, before the U.S. Senate Committee on the Budget (GAO Report) regarding government efficiency and effectiveness.   In this Report, the GAO revealed that for the first time in four years, the estimate of government-wide improper payments had increased significantly, rising from $105.8 billion in 2013 to almost $125 billion in benefits paid to ineligible recipients in 2014.  Nearly $78 billion of the total was accounted for by improper payments by the Medicare program ($60 billion) and the Medicaid program (nearly $17.5 billion).

The GAO reported that while the Centers for Medicare & Medicaid Services (CMS) demonstrated strong commitment to reducing improper payments, the rate of improper payments remained too high.  The Report made a number of suggestions to CMS for addressing this problem, including exercising its authority (provided under the Affordable Care Act) to strengthen provider and supplier enrollment provisions and performing certain pre-payment and post-payment claims reviews (as previously recommended by the GAO).  For example, the GAO suggested that CMS implement more robust enrollment requirements, such as requiring surety bonds for certain providers, which would make providers more likely to uphold the “promises” made at enrollment.  GAO also emphasized the need for CMS to improve pre-payment claims review and cited an example of using automated edits that can assess the quantity of services provided to a beneficiary by the same provider on the same day, which would more effectively detect fraudulent claims by preventing providers from billing for multiple claims to prevent a claim denial. The GAO also recommended that CMS adapt its systems to allow social security numbers to be removed from Medicare cards. Removal of social security numbers would make this information less accessible to others and therefore help decrease the likelihood of identity theft.

With respect to Medicaid, the GAO noted that third party liability issues remain a major problem for states and recommended that CMS better monitor and share information with states regarding these issues.  The GAO suggested that CMS strengthen states’ program integrity activities by requiring audits. The reporting of key data could also help improve the accuracy of audits and payment recovery.  Finally, the Report emphasized the need for HHS to tighten spending limits on Medicaid demonstrations.  By improving the review and approval process for determining spend limits on such demonstrations, the GAO predicted that HHS could save the federal government another $21 billion over 5 years.

In the face of such a high number of improper payments and pressure to curb further growth, this Report may serve as a useful roadmap of HHS’s enforcement and cost-containment priorities in the coming fiscal year.  Click here for the full Report.

Written by: Bridgette A. Wiley

The US Department of Justice (DOJ), the Department of Health and Human Services’ Office of Inspector General (OIG), and other federal and state agencies continued to focus on health care enforcement as a top priority in 2014.  Companies in the health care industry were subject to steep monetary penalties and high dollar settlements, while individuals saw lengthy prison terms and the imposition of large fines, forfeiture, restitution, and settlements.

My colleagues Hope Foster and Bridget Rohde recap 2014 health care enforcement actions, highlight key takeaways, and forecast what to expect in 2015 in their recently published Health Care Enforcement Year in Review and Forecasting Report.  Hope and Bridget will also host a webinar on Thursday, February 5, 2015, from 12:00 – 1:00 EST to discuss the key enforcement trends of 2014 and their likely impact on the activities of these very active agencies in 2015.  Topics for discussion include:

  • The prioritization of cases against health care providers, including doctors, nurses, and other medical practitioners;
  • The expanding array of criminal charges leveled against companies and individuals to include not only health care fraud, anti-kickback statute violations and false statements, but also identity theft, money laundering, tax violations, and obstruction of justice;
  • The geographical reach of these actions, as DOJ continues to bring cases across the country;
  • The continued focus of the DOJ Civil Division on alleged provider and procedure fraud; and
  • The ongoing importance of qui tam relators in health care enforcement.

For more information about the upcoming webinar and to register, click here.